Taking Your Company's Viability Temperature

Given the current and upcoming conditions of our industry, wouldn't it be nice to take an arbitrary business temperature to see if you're running a fever or are just fine at 98.6 degrees?

Managing a home care operation, whether it is a $1 million mom ‘n’ pop or a multiple-location enterprise, is a little like operating a restaurant. The restaurant and your HME both have good employees and faithful customers who frequently refer others to the business.

However, this is where the similarities end. Where the restaurant's customer is whipping out his cash or credit card to pay his bill while he's still licking pie crumbs from the plate, you are licking your cash-flow wounds as you stare vacantly at your Medicare ANSI-driven report, asking, “Where's the money?”

At the end of the day, our restaurant owner knows the exact state of his financial health because the cash in his till represents the sum total of the cash flow of his entire enterprise to the minute. You, on the other hand, work in a cash-flow world that stretches over months.

Lastly, the local boil-and-fry cookery primarily deals with one regulatory source — the local health department. You deal with HIPAA, JCAHO, FDA, OIG and others. An extemporaneous visit by the food inspector with his cooking thermometer clipped to his shirt pocket can be resolved on the spot: “Yes, sir, I'll turn up the fry pan and get those burgers to 155 degrees.” You, in your worst-case scenario, are “assuming the position” while the FBI carts away your files.

It's time to take your company's viability temperature to ensure the worst-case scenario remains an improbability.

Taking Your Vitals

The following conditions correspond to the letters on the risk-analysis chart on the next page. Think carefully about each category, and assign yourself a position on the risk continuum. Then, you will be able to score the results to see if your company is at risk for future problems.

A. Market Conditions

Are all your eggs in one basket? What is the percentage of high payers to low payers? Caveat: You could have a large number of high payers, but it's a one-egg (Medicare) basket. What happens when national competitive bidding hits? Do you have any long-term contracts, or does your business run by rotating referral? What's the strength of your sales staff? Finally, what is your product mix of DME to oxygen?

B. Regulatory Issues

Are there any current, past or pending violations that could come back to haunt you or affect your company's future viability?